Rio Tinto won’t easily ditch its dual structure, despite its lack of style
Activist fund Palliser Capital has described the miner’s complex approach as an ‘unmitigated failure’
Even when a style goes firmly out of fashion, some loyal devotees still don’t give it up. Take Kate Moss and skinny jeans.
The corporate world’s equivalent is the dual-listed company (DLC) structure. Typically this is where two companies have — instead of a conventional merger — kept their separate legal identities and stock market listings but are operated as a single business.
Benefits can include tax advantages. But increasingly DLCs are seen as outmoded, value destructive and a potential block to large M&A. Well-known DLCs have been collapsed in recent years, including BHP, Shell and Unilever — often under pressure from activist investors.
Rio Tinto, a nearly three decade-long DLC devotee, is under fire from activist fund Palliser Capital to follow suit by unifying its corporate structure in Australia and shifting its primary listing to Sydney.
